After COP21, shareholders lobby on behalf of climate


Last month's international agreement on combating climate change was a long-overdue and welcome development for sustainable investors, who for years have been calling for government policies that encourage increased investment in clean energy technologies. 

Yet much work remains to be done before the transition to a low-carbon economy is realized, and until regulatory regimes are firmly in place, the movement of private sector funds into renewable energy and other strategies is likely to fall short of the trillions of dollars that will have to be mobilized. 

Sustainable investors, of course, have not sat idly by awaiting the transition, but for decades have filed shareowner resolutions in strikingly successful efforts to persuade corporations to improve the performance on environmental, social, and corporate governance (ESG) factors.

While sustainable investors cannot be described as emboldened for continuing a tradition of so many years, a new shareowner coalition coordinated by Walden Asset Management and others seeks to shine a light on the practice of energy companies to fund, through direct lobbying and/or trade association membership, efforts to derail regulatory efforts to mitigate the worst effects of climate change. 

"Investors have filed shareholder resolutions at 11 oil and gas companies," a Walden press release states. "The resolutions urge the companies to fully disclose their lobbying activities and expenses (direct and indirect through trade associations) and to review their public policy advocacy on energy policy and climate change." 

Eleven companies were recipients of resolutions requesting disclosure of lobbying expenditures relating to climate change. Four of those companies — Chevron, ConocoPhillips, Devon Energy and Exxon Mobil — also received resolutions requesting comprehensive reviews of their positions and oversight related to "public policy advocacy on energy policy and climate change." 

The sponsors of the two resolutions include sustainable investment firms, public pension funds, faith-based investors, trade unions, foundations and nongovernmental organizations. 

"This is a critical moment for investors to press oil and gas companies to be transparent about their lobbying expenditures and assess whether their lobbying dollars are spent to maintain the status quo on climate change policy," Timothy Smith of Walden Asset Management stated.

"A company whose lobbyists or trade associations actively impede the Clean Power Plan or fight renewable energy at the state level is standing on the wrong side of this urgent global effort to address climate change. Investors are calling on the oil and gas industry to pause and assess the climate impact of their lobbying and stop or alter lobbying that does not advance effective climate policy." 

Proponents cited opposition by the U.S. Chamber of Commerce and other trade associations to the Obama administration's Clean Power Plan; recent revelations of how much Exxon Mobil knew about climate change while actively subsidizing climate denial; and trade association opposition at the state level as justification for the shareowner resolutions. 

"There is mounting evidence of the significant long‐term impacts of climate change on our energy infrastructure and, ultimately, the ability of energy companies to deliver their products and sustain a profitable business model," Connecticut State Treasurer Denise Nappier stated.

"This has not gone unnoticed by the energy sector, given the active lobbying on climate change policy and regulations. Shareholders have every right to know how company resources are being expended to lobby around these issues, as well as the measures taken by company management to protect the company’s financial health and shareholder value."

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